Yahoo did it again. Not only did the pathetic Yahoo Inc. (Nasdaq: YHOO, stock) screwed up with its latest earning announcement but it somehow re-use the old, basic and dirty way hoping to soothe the investors when announced as many as 1,000 employees would be sent to the chopping board. Regular readers of FinanceTwitter know I never invest or trade Yahoo’s stock, for obvious reason. During bullish period, probably investors would give the stock a little lift but in the current gloomy market, such action simply didn’t work – the stock was punished by 10 percent lower.

Yahoo reported a 23 percent drop in its fourth-quarter profit. The search engine company which is still eating the dust left by Google Inc. (Nasdaq: GOOG, stock) in terms of leadership earned $205.7 million (15 cents per share) during 2007’s final three months, down from net income of $268.7 million (19 cents per share) at the same time in 2006. For the full year, Yahoo’s profit decreased 12 percent to $660 million. Fourth-quarter revenue totaled $1.83 billion and after subtracting commissions paid to advertising partners, Yahoo’s revenue was $1.4 billion – in line with analyst estimates.

Immediately after the poor result, the old story of Microsoft Corp. (Nasdaq: MSFT, stock) buying Yahoo re-emerged. This time the frustrated investors do not think Yahoo would have any bargaining chip but rather would be begging for buyers. I still do not understand why Yahoo couldn’t emulate Google’s success, not that the investors didn’t give Yahoo time to catch-up despite its promise for a turnaround. Yahoo is moving by a very, very slow pace and I believe investors are losing patience.

Nevertheless Yahoo Inc.’s pathetic performance will only makes Google Inc. looks great. During normal circumstances I would rush in for Google’s stock as Yahoo’s loss is Google’s gain but looking at current economy status, I would be extremely cautious with Google’s Call Options (maybe I’ll limit my positions with good time-value).